People losing jobs at faster rate

More people leaving their jobs are going involuntarily than during the global financial crisis, official figures show, a sign of the structural changes hitting the economy.

One in six of the 2.5 million people who left their jobs in the 12 months ended February were retrenched, made redundant or their employer went out of business, according to Australian Bureau of Statistics data. In 2008, during the GFC, the figure was 1 in 10.

The figures don’t suggest more Australians are being fired than during the crisis - rather that the a higher proportion of recent job losses were involuntary.

The unemployment rate has been between 5 and 5.3 per cent for the past year.

Economists say the high proportion of redundancies are most likely in industries such as manufacturing and retailing, which are in decline because of changes in consumer spending and the high dollar.

“If we have this structural change and the part of the economy which has been absorbing some of these displaced workers is now cooling down, then obviously it puts a few more questions out there about what is going to drive employment growth in the foreseeable future," said Gavin Stacey, an interest-rate strategist at Barclays Capital.

The booming resource sector has been absorbing people who have lost their jobs in other industries, he said.

According to ABS data released on Wednesday, employee compensation costs increased by 1.4 per cent in the three months ended June 30, reflecting strong demand for labour.

Related Quotes

Company Profile

But as commodity prices fall and demand from China slows there are early signs of a pause in labour demand from mining and other resources companies.

BHP Billiton’s Olympic Dam project, kyboshed by chief executive
Marius Kloppers
in August, would have employed 10,000 people over a decade. Fortescue Metals Group’s decision this week to delay part of its Pilbara expansion led to the sacking of more than 1000 employees and contractors.

HSBC chief economist Paul Bloxham said there was little evidence of structural unemployment, where people made redundant from shrinking industries failed to get jobs elsewhere.

Structural unemployment might become a problem if the resources industry were to start cutting a lot of staff.

“The jobs that are being lost, there seem to be more jobs being created. We still have employment growth," he said.

“Though as some of these projects that were going to go ahead stay on the shelf, then there may be some mitigation of that impact. It’s all part of the broader story of course, but we were trying to do a lot of mining investment all at once and very quickly."